Fuel surcharge: how to calculate yours and not lose money on fuel
A fuel surcharge per mile equals (current diesel minus your peg) divided by your MPG. Here is how pegs work, how brokers shortchange it, and how to charge a real one.
A fuel surcharge is how you keep diesel swings from eating your margin – and a lot of operators leave money on the table because they never set one properly. The formula is simple: fuel surcharge per mile = (current diesel price – baseline peg) / your MPG. The details – the peg, the benchmark, and how brokers quietly shrink it – are where the money is. Try the live numbers in our fuel surcharge calculator.
How the formula works
Three inputs: the current diesel price, your baseline peg (the diesel price already built into your line-haul rate), and your truck’s MPG. Subtract the peg from the current price to get the per-gallon gap, then divide by MPG to convert it to a per-mile cost. When diesel is at or below your peg, the surcharge is $0 – the fuel cost is already covered by your line-haul.
Why the peg and MPG decide everything
Two levers move your surcharge. A lower peg means more of the diesel price gets recovered through the surcharge – shippers like a high peg for the opposite reason. And lower MPG means a bigger surcharge, because you burn more gallons per mile: a truck at 6 MPG needs a larger per-mile surcharge than one at 7 to recover the same fuel. Use your real loaded MPG, not the brochure number.
Use the published benchmark
Reference a public number so your surcharge is defensible: the EIA weekly U.S. on-highway diesel average (also published as FRED series GASDESW). Quoting “the EIA national average for the week” beats arguing over what one truck stop charged. You can watch the diesel line on our rates dashboard.
How brokers shortchange the surcharge
- A high peg – starting the surcharge at an inflated diesel price so little of the real cost gets recovered.
- A stale benchmark – using last month’s diesel average when prices have climbed.
- Burying it in the line-haul – quoting one “all-in” rate so you cannot see whether fuel is actually covered.
Always separate the line-haul from the fuel surcharge so you can see both. The surcharge is not a favor; it is recovering a cost, the same way a accessorial charge recovers detention or a lumper.
Put it together
The surcharge sits on top of a line-haul rate that already clears your cost per mile. If your line-haul does not cover your costs, no surcharge fixes a bad load – it just covers the fuel on a loser. Price the line-haul to your cost per mile, then add a real, benchmarked surcharge.
The bottom line
Set a fair peg, use your real MPG and the EIA benchmark, and keep the surcharge visible and separate from the line-haul. Run the numbers in the calculator for any lane before you book it – fuel is your biggest variable cost, so do not give it away.
Frequently asked questions
How do I calculate a fuel surcharge?
Subtract your baseline peg diesel price from the current diesel price, then divide by your truck's MPG. The result is your fuel surcharge per mile. If diesel is at or below the peg, the surcharge is zero.
What is a fuel surcharge peg?
The peg (or baseline) is the diesel price your surcharge starts from - the price already built into your line-haul rate. Everything above the peg gets recovered through the surcharge.
What diesel price should I use?
Most surcharges reference the EIA weekly U.S. on-highway diesel average (also on FRED as GASDESW). Use the published benchmark, not a single station, so the number is defensible.
Why does MPG matter in a fuel surcharge?
Because the surcharge converts a per-gallon price gap into a per-mile cost. A truck getting 6 MPG burns more fuel per mile than one getting 7, so it needs a larger surcharge to break even.
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